12 March 2025
In 2024, we saw some major shifts with the implementation of the Closing Loopholes legislation, impacting the way in which employers need to manage casual employment relationships. In light of this, we have included an overview of key considerations for employers regarding casual employment below.
The Employee Choice Pathway
On 26 August 2024, the process of casual conversion was redefined under a new concept called the “Employee Choice Pathway” which allows casual employees to request a conversion to permanent full-time or part-time employment after working for the same employer for at least 6 months (or 12 months if employed by a small business).
This change is aimed at providing casual workers with the option to seek more job security, paid leave, and the benefits typically associated with permanent positions.
For non-small businesses, this change took effect on 26 February 2025. However, for small businesses, the changes won’t take effect until 26 August 2025.
An employer who receives a notice of casual conversion through the employee choice pathway must consult with the employee about their request and ensure a written response is provided within 21 days.
An employer can refuse the change if the employee still qualifies as a casual under the definition or if there are reasonable operational grounds for refusal, such as significant changes to business operations or employment conditions.
Casual conversion (the previous term) is still available for some casual employees for a transitional period until 26 August 2025.
An employment relationship is considered casual if:
- There isn’t a firm advance commitment to continuing and indefinite work, taking into account a number of factors, including the real substance, practical reality and true nature of the employment relationship.
- They’re entitled to receive a casual loading or specific casual pay rate.
The changes also introduce anti-avoidance penalties for improperly engaging casual workers. Breaches of these provisions can attract civil penalties (up to $93,900 for individuals and $469,500 for body corporates).
Employers must NOT:
- dismiss or threaten to dismiss an employee with the plan to re-engage them as casual.
- making false statements to persuade an individual to enter a casual employment contract.
- misrepresenting employment as casual.
The Employee Choice Pathway is a workplace right and casual employees may be protected under the General Protections provisions of the Fair Work Act 2009 (Cth).
The Employee Choice Pathway is reshaping the casual employment landscape. Employers must be ready to adapt to these changes and ensure they comply with the new changes. Understanding the timelines, responsibilities, and processes will be essential to staying ahead and compliant.
Ending Casual Employment
In the past, employers have often viewed casual employment as a flexible arrangement whereby employers can terminate employment without providing notice. However, a recent case heard by the Fair Work Commission reinforced that dismissal claims are not restricted to permanent employees, as a casual employee successfully challenged his dismissal and lodged a general protections claim.
When the claim was initiated, the employer argued that given that the employee’s casual status meant there was no guarantee of ongoing work, no dismissal had taken place and the employment relationship came to a natural end due to a lack of available work. However, the Fair Work Commission determined that, as the employer directly told the worker he was no longer needed, this constituted ‘termination on the employer’s initiative’ and therefore met the criteria for dismissal per the Fair Work Act.
A key takeaway from this case is that the termination of any employment relationship, including casuals, should be done transparently and assessed from a compliance perspective prior to commencing the process.
If you would like more information on how to best manage your casual employees, or how these changes may impact your or your organisation, please contact us via the link below.
